US poised to hit 1994-levels of CO2 emissions this year, says BNEF

Analysts at Bloomberg New Energy Finance (BNEF) have forecast that 2015 will be a watershed year for the U.S.’s decarbonization efforts, predicting that the country will reach a two-decade low in power sector emissions nationally this year.

BNEF’s research suggests that the U.S. will pump out the lowest amount of CO2 since 1994 as efforts to transform the nation’s power sector bear fruit.

Coal-fired power plants will be shuttered at a record rate in 2015, allied to increased consumption of natural gas and a record-breaking 12 months of renewable energy development and deployment.

The analysts estimate that 18 GW of new renewable energy capacity will come online in the U.S. in 2015, of which solar PV capacity will contribute 9.1 GW – a record. Half of that PV capacity will be built in the state of California alone, adds BNEF, while wind power will grow by 8.9 GW, which would represent the third-best year for the sector.

Equally, however, the U.S. is making valuable strides in other areas, most notably its efforts to cut the country’s coal consumption: in 2015, more than 23 GW of coal power is expected to come offline, lowering the U.S.’s coal footprint by 7% as cheaper natural gas, cheaper solar, aging coal-fired units and new standards on mercury and carbon emissions bite.

The growth of the fracking-backed natural gas sector will fill most of the coal hole, with record amounts set to be burned this year as process fall to below $33/MMBtu.

With all of these factors combined, says BNEF, power sector emissions in the U.S. will be 15.4% below those recorded in 2005, putting the country well on course to hit its target of lower emissions across all sectors of the economy by 28% by 2030.

"More interesting than the single-year drop in emissions are the ‘structural’ impacts that will live on for decades," mused BNEF’s head of North America analysis, William Nelson, who suggests that 2015 will be a giant, permanent step towards setting the U.S. on course for falling emissions and a decarbonized future.

The BNEF report notes, however, that 2015 will be an exceptional year, a period where a convergence of factors comes together at once, and warns that the pace of decarbonization afterwards will be slower.

"We may never again see 23 GW of coal capacity retire in a single year, and renewable build could drop significantly in 2017, when important federal tax incentives step down or expire," said Nelson.

The report looked in-depth at the still-stark regional differences across the U.S., noting how the pro-PV policies that have underpinned California’s solar boom are lacking in many other states, and describing how Texas is able to account for one-third of new wind capacity thanks to new transmission lines that are simply not feasible elsewhere.

Addressing these imbalances will be key, the paper notes, if the U.S. wishes to experience many more years like 2015.